Dispute over trade tariffs: EU-US tariff agreement fails to establish tranquility
The European Union (EU) is employing a multifaceted approach to avoid further conflicts and manage trade relations following the recent agreement with the United States. According to reports, this strategy includes comprehensive conflict prevention, mediation, and peacebuilding efforts, as well as internal security enhancements.
German exporters, according to Michael Hüther, Director of the Institute of the German Economy (IW Cologne), are expected to manage the 15% tariff rate due to their market position. However, Hüther suggests that a more powerful negotiating strategy by the EU could have been more effective.
Veronika Grimm, a member of the Council of Economic Experts (SVR), has called for action from the EU after the agreement. Grimm is ambivalent about the impact of tariffs on the German economy but is relieved that high tariffs for the automotive industry will not remain in place.
The proposed EU strategies focus on strengthening early warning systems, enhancing diplomatic mediation, and linking peace initiatives with EU security interests. Key strategies also involve deploying advanced tools like the EU conflict Early Warning System and the Horizon Scanning mechanism to identify instability risks timely, while improving coordinated preventive actions by the European External Action Service (EEAS) and other EU bodies.
Specifically, the EU's internal security strategy, ProtectEU, addresses organised crime and terrorism risks, which can affect broader peace and stability. Measures include revising procurement rules for defence and security, adopting new counter-terrorism agendas, and establishing multi-agency transport and supply chain security alert systems.
The EU emphasizes discreet, behind-the-scenes peacebuilding and mediation rather than highly visible declarations, aiming to directly link peace efforts to EU security concerns in regions whose instability could impact Europe, such as the Sahel or the Middle East. The EU also engages through diplomatic channels, institution-building, and economic support to stabilize conflict-prone areas, enhancing its peace mediation role globally.
These strategies resonate with broader international efforts, with the EU closely coordinating with the UN and other partners on preventive diplomacy and peaceful dispute resolutions to ensure that diplomatic tools are fully leveraged before conflicts escalate.
Grimm criticizes the EU's practice of incurring debt to buy weapons and energy from the USA, stating that it is not a growth strategy for the EU. Grimm also considers the import of energy and weapons from the USA necessary, as the EU will be dependent on imports in the long run. However, Grimm expresses doubts about the binding nature of the purchase and investment promises from the agreement.
Hüther expects a short-term relief in the trade conflict, but warns that US consumers will likely bear the brunt of the tariffs. He does not expect the agreement to trigger euphoria, as tariffs burden global economic division of labor.
In summary, the EU combines trade cooperation with proactive, multifaceted peace and security strategies—including enhanced early warning, strategic mediation, and internal security enhancements—to prevent and manage conflicts following the trade agreement with the USA. The EU's focus on its own growth agenda and the need for a more robust negotiating strategy are key concerns raised by economic experts.
The financial implications of the EU-US agreement extend to the business sector, as German exporters anticipate managing a 15% tariff rate due to their market position, according to Michael Hüther. In the realm of politics and general-news, Veronika Grimm, a member of the Council of Economic Experts (SVR), criticizes the EU's debt accrual for purchasing weapons and energy from the USA, expressing doubts about the binding nature of the agreement's investment promises.
